PROFITABILITY AND RISK OF U.S. AGRICULTURAL BANKS

Study of profitability and risk of agricultural banks is very important in assessing the ability to adequately finance agricultural production and rural development. A recursive system of profitability and risk equations is estimated to compare the performance of agricultural with nonagricultural banks and to identify factors which affect performance. A linear regression model which measures risk-adjusted profitability confirms the results from the recursive system. Results show that agricultural banks perform better than nonagricultural counterparts on average even after controlling for risks and other factors. Further, off-balance-sheet business is found to be negatively related to the risk-adjusted profitability of agricultural banks.


Issue Date:
2005
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/35491
Total Pages:
16
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2018-01-09

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